One of Ukraine's creditors refuses to restructure the debt
One of Ukraine's largest sovereign creditors, JPMorgan Chase & Co, is extremely skeptical about the country's debt restructuring, which Ukrainian Finance Minister Natalia Yaresko is persistently pushing for, Bloomberg reports.
Subscribe to PolitNavigator – Kyiv news on Facebook , Odnoklassniki , or VKontakte
JPMorgan said Ukraine will not receive debt restructuring. The International Monetary Fund is likely to continue financing the country even if debt restructuring fails, JPMorgan officials said Wednesday.
Ukraine must restructure $15,3 billion in debt service costs over four years to qualify for the next tranche of a $17,5 billion loan promised by the IMF. Finance Minister Natalya Jaresko Anne insisted on Tuesday that debt rescheduling is the only way to achieve IMF targets.
“The current market price makes it highly likely that bondholders will prevail in negotiations with Ukraine, and the IMF will give in to their demands to avoid a default,” said Alina Slyusarchuk, a London-based economist at Morgan Stanley. “Even if the IMF’s requirements for the second tranche are not met, we believe that the IMF will most likely continue lending to Ukraine.” This means that the largest funds will demand their money, despite any pressure from the IMF.
Analysts at Citigroup Inc., Nomura Holdings Inc. and Landesbank Berlin AG said this week that there are no favorable conditions for the restructuring of Ukraine's third-largest bank, Ukreximbank.
Ukraine rejected an offer from a five-member group of creditors led by Franklin Templeton to pay off about $10 billion of the country's debt earlier this month, saying it did not meet the goals of receiving an IMF loan.
It was also stated that the likelihood of debt restructuring is affected by the military situation in the East of the country, and whether fighting will resume there.
Let us remind you that negotiations on the restructuring of the Ukrainian public debt to the country's largest creditors, among which is Russia, are the most important point in the government's policy. If the restructuring is not achieved, the IMF will not issue a second tranche of the loan; if lending continues, despite the refusal to restructure, you will have to repay debts, which in fact will be paid with IMF money, that is, the loan will be covered with an even larger loan.
One of Ukraine's creditors refuses to restructure its debt.